Sign A series or Not

[Choice2U]

Heard that CWB was only going to offer an A series contract this year. If I sign up and significant numbers don't (hold their wheat, CWB tonnage will be down yet costs (plebicite/advertising/etc) will be up resulting in a poor pool return. Should a guy go with the FPC and lock in a poor return now (in comparison to other farmers in Canada and the world) or risk it with the pool and a potentially worse return? As I read this, I think I answered my own question although it sure would be nice to see what happens and actually benefit if the weather down south goes south.

[Hopperbin]

plebicite costs should have come from contigency fund but one never knows.

[bucket]

Leave all the board supporters fill the contracts.

The 20% of farmers asking for change grow 80% of the grain.

The board supporters could not fill a 60000 tonne durum boat last year and it cost millions in demurrage.

Lets see how this plays out for oberg if open market advocates decide not to sign contracts with the board.

And instead sell 12 dollar canola, 9 dollar peas, 15 dollar flax - and then wait for next year with the wheat and durum.

[freewheat]

Exactly bucket, don't feed the monster.
Sell your wheat to a local pig barn,
anything but feeding the monster.

[BreadWinner]

No A series here, I will hold my wheat till next August or give it to the pigs to eat. Signing up is like giving a vote to the CWB lovers. If thing continue this way over a the CWB we may see an open market earlier than later. I am afraid they have sumk their ship and there is no raising it.

[Tucker]

I signed a FPC for $8.50 net early this
spring for 25bpa. Decent return but the
same day I could have gotten a contract
for $10.50 with an open market. Those CWB
thieves got their $2/bu from me, I'll bin
the rest until freedom day. No pool for me
this year, not a chance.

[Braveheart]

There are lots of very big farms that support the single desk. There are lots of small farmers that don't. Teh divide knows no pattern.

We'll sign an A contract. We have milling wheat and the board is the only game in town. If you can afford to hold it fine. But take some price protection. Maybe put options but at least some strategy. Prices should continue relatively strong this year but next year sho knows? If the world economies keep tanking even strong fundamentals might not translate to high prices.

[mbratrud]

Be careful, remember you can't do anything until next August, and we seem to be in a market that is softening a bit.

In the case of Durum the price was rising and they were short top quality. Plebecite cost even if they come in at 10 million and it comes out of the pool it would be less than a dollar a tonne..

Sales that have been made to date could be some of the highest.

If Ritz and crew fumble this and dont have things in place by Aug 1 you only hurt yourself.

So as much as it may be tempting to not sign an A series, really give it some really serious consideration.

Point is you really could hurt yourself more than the CWB. If the price drops they may even be able to say that they did a better job this year if they are working with a smaller tonnage.

Just some thoughts to consider.

[charliep]

Agree. Make a business decision based on market outlook and your cashflow needs - not politics. If you would store in an open market, then store under single desk.

Would use the CWB producer payment options. CWB basis levels are historically wide (with a caveat I have watched for 10 years and still don't understand except as an arbitrary number that adjusts to world values - no predictability). With extentions of both flexpro and fpc to January, I would be watching both futures rallies and stronger basis to lock in favorable values. Futures only gives me some concern but again basis is arbitrary/not tied to anything.

Will note you have to sign an "A" series contract to deliver on any CWB producer payment options.

[charliep]

Only other comment for wheat ex durum - make your decision on the flexpro/fpc values and not the PRO.

[URL="http://www.cwb.ca/db/contracts/ppo/ppo_prices.nsf/fixed_price/2011_index.html"]fpc[/URL]

<a href="http://www.cwb.ca/public/en/farmers/producer/historical/">historical fpc and basis</a>

[wd9]

All my wheat came off at 11% moisture number 1. Think i'll not be making a CWB contract until i see what the hell is going on with this industry.

What a mess, the concept of get it done and have a stable industry is completely elusive as soon as the CWB is involved.

[bucket]

Well, lets see how they get the boats filled that are due in October and how quick some GDCs come out.

Then you will know how much support there is and how short they are on their contracts.

[Choice2U]

Thanks guys....allot of food for thought. Can't afford to hold it so I might just do the FPC and run.

[$short]

what do we do with durum. Use an EPO as our put.

[mbratrud]

That EPO is a pretty expensive put option right now. Durum values should be less risky to hold. See what the September and October Pros do before making your decision.